Fed Ends Crypto Oversight Program, Returning Banks to Standard Supervision
The Fed has officially ended its Novel Activities Supervision Program which monitored banks’ crypto activities...
Quick overview
- The Fed has ended its Novel Activities Supervision Program, which monitored banks' crypto activities since 2023.
- Insights from the program will now be integrated into the Fed's regular supervisory framework, indicating confidence in banks' ability to manage crypto risks.
- Banks are now permitted to offer safekeeping and custody services for crypto assets under federal oversight, with updated guidance on risk management.
- This decision reflects a broader trend towards a flexible regulatory approach to digital assets, promoting innovation while ensuring systemic safety.
The Fed has officially ended its Novel Activities Supervision Program which monitored banks’ crypto activities. Launched in 2023 the program aimed to deepen the Fed’s understanding of emerging financial technologies and the associated risks. According to the Fed’s Friday statement the agency will now incorporate the insights from this program into its regular supervisory framework.
“The Fed’s experience with the program has given us a better understanding of crypto within banks,” the statement said. “These will inform our ongoing supervisory practices.” The supervisory letter that launched the program has also been withdrawn in full, and we are back to business as usual.
Impact on Banks and Crypto Services
By ending the program the Fed is signaling that it has confidence in banks to integrate crypto risk into regular supervision. The agency previously issued guidance on banks’ engagement with cryptocurrencies and stablecoins. This guidance was updated in April and provides clearer standards for operational safety, risk management and customer protection.
🚨 August 15, 2025 — The Fed ends its special crypto oversight program for banks.
Crypto activities now fall under standard supervision.
Less red tape, more room for innovation?https://t.co/k9k3LnJhzL
— Walterson Cadet (@cadet_walterson) August 17, 2025
Key points for banks:
- Safekeeping and custody services for crypto assets are permitted under federal oversight.
- Banks must have robust risk management for crypto related activities.
- Regulatory alignment with OCC and FDIC to ensure consistent supervision.
The move is part of a broader trend towards a more flexible regulatory approach to digital assets. Banks now have guidance on offering crypto services without needing a special oversight program.
Broader Regulatory Context
The Fed’s move aligns with the evolving federal view of cryptocurrencies. The SEC and CFTC are actively working on frameworks for digital asset regulation. Statements from the Treasury and banking agencies suggest a collaborative approach, balancing innovation with systemic safety.
Under this environment banks will need to be transparent and operationally sound while exploring crypto opportunities. Analysts see the Fed incorporating program insights into regular supervision as a step towards harmonized oversight and reducing uncertainty for institutions in the digital asset space.
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